Gschäftsbericht 2018

Galenica financial statements 2018| 95 Finance Notes to the consolidated financial statements of the Galenica Group 4. Business combinations and disposals Accounting principles Business combinations are accounted for using the acquisition method. Consideration transferred comprises payments in cash as well as the fair value of the assets transferred, the obligations entered into or assumed and the equity instru- ments transferred. Transaction costs are recognised directly in profit or loss. Goodwill is recognised at cost at the acquisition date and corresponds to the difference between the consideration transferred and the fair value of assets, liabilities and contingent liabilities identified in the purchase price allocation. Goodwill is capitalised and included in intangible assets, while negative goodwill is recognised immediately in profit or loss. After initial recognition goodwill is recognised at cost less any accumulated impairment. Contingent consideration is measured at fair value at the acquisition date and not remeasured subsequently for equity instruments. If the contingent consideration qualifies as a financial instrument, it is remeasured to fair value and any difference is recognised in other operating income or other operating costs. The difference arising from the acquisition of additional non-controlling interests in fully consolidated companies (purchase consideration less proportionate carrying amount of non-controlling interests) is considered to be an equity transaction and is thus taken directly to retained earnings in shareholders’ equity. Gains and losses resulting from the disposal of interests in consolidated companies without loss of control are also recognised in retained earnings. If a cash-generating unit (CGU) or group of CGUs is sold, goodwill is taken into account when calculating the profit or loss on disposal. The profit or loss on deconsolidation is recognised in operating income or other operating costs. Business combinations 2018 Acquisition of pharmacies. Galenicare Holding acquired 100% of the interests in pharmacies in various locations in Switzer- land and the remaining 51% of the shares in the Swiss company Bahnhof Apotheke Zürich AG (formerly Ingrid Barrage AG) as at 2 July 2018 (refer to note 16). Upon acquisition, most of these pharmacies were merged with Galenicare Ltd. The purchase consideration amounting to CHF 51.1 million, of which CHF 47.4 million was settled in cash and CHF 2.4 million was offset against loans. The deferred purchase price consideration of CHF 1.3 million falls due in the year 2019. The fair value of the net identifiable assets amounted to CHF 19.2 million at the acquisition date. The goodwill of CHF 54.5 million was allocated to the business sector Retail and corresponds to the added value of the pharmacies based on their locations. Transaction costs were insignificant. Other acquisition. On 3 January 2018 Galenicare Holding acquired 100% of the shares in the Swiss company Careproduct AG. The company offers efficient solutions to support and increase the mobility in everyday life of older and disabled people. Careproduct supplies walking frames, wheelchairs, incontinence products and other medical aids both online and offline. The purchase consideration amounting to CHF 4.0 million was settled in cash. The fair value of the net assets amounts to CHF 0.4 million at the acquisition date. The goodwill of CHF 3.6 million was allocated to the Retail business sector and corresponds to the added value based on the acquirer-specific synergies expected to arise from the acquisition, the growth in market share particularly in the online distribution. Transaction costs were insignificant. Pro forma figures for acquisitions made in 2018 for the full 2018 financial year Since their inclusion in Galenica’s scope of consolidation, the businesses acquired contributed net sales of CHF 38.0 million and an operating result (EBIT) of CHF 1.6 million to the Group’s results. If these acquisitions had occurred on 1 January 2018, they would have contributed additional net sales of CHF 21.8 million and increased EBIT by CHF 1.2 million.